Suchergebnisse

In the quarter century since its emergence from military rule and integration into the global economy, Bangladesh's economy has achieved high growth, reduced aid dependence and made remarkable improvement in social indicators while at the same time it continues to suffer from increasing inequality. This book analyses these successes and failures.

Since the beginning of the 1980s the less developed countries
(LDCs) have been getting integrated with the global economy at a rapidly
accelerating rate. The impetus for the process came from the need to
make adjustment in the unsustainable imbalance in the external account
that most of these countries experienced in the aftermath of the oil
shocks of the 1970s and the declining demand for their exports due to
the recession in the OECD countries during the 1980s. Many of these
countries had to subject themselves to structural adjustment programmes
at the behest of the multilateral donor agencies, led by the World Bank
and the International Monetary Fund, who emphasised the urgency of
reforming the protectionist trade regimes of these countries.
Simultaneously, these countries came to realise the inefficiency of
resource use fostered by their past strategy of import-substituting
industrialisation (ISI) characterised by a trade and investment regime
that enshrined overvalued exchange rates, quantitative import controls,
high and non-uniform rates of effective protection, discrimination
against export and strong impediments to foreign direct
investment.

The concept of capital-intensity, denned as the ratio of
capital to labour, has been used widely in both theoretical and applied
problems of planning. These ratios have often been used in forecasting,
e.g., in measuring the possible expansion of employment that would be
generated from a given investment programme and in estimating the rate
of investment that would be required in achieving a given employment
target. More importantly, these ratios have been recommended for use in
optimum decision-making. The usual argument is that in a labour-surplus
backward economy with scarcity of capital, it is costless or nearly so
to use labour which produces little at the margin. Thus, a given amount
of capital, the scarce resource, should be combined with as much labour,
the abundant resource, as possible. Minimizing capital-intensity has,
thus, emerged as an investment criterion: from alternative sectors those
with lowest capital-labour ratios should be expanded and from
alternative technical blueprints for each sector the projects with the
lowest capital-intensities should be chosen. The corollary in trade
theory has been to identify comparative advantage with labour-intensity
for the labour-abundant economies.

The purpose of the present set of exercises is to study the
possibilities of the East Pakistan economy during the fourth five-year
plan period (1970-75) with the help of an explicit model. The model we
employ is a multisectoral one of the simple consistency type. It is a
multisectoral or detailed model for plan¬ning in the sense that it
distinguishes as many as twenty-nine producing sectors of the economy of
East Pakistan and explicitly takes into account all intersectoral
deliveries of current and capital goods. The definite advantages of a
multi-sectoral model over its alternative, a highly aggregated model,
need hardly be pointed out. Since sectors with widely varying
resource-requirements can easily have widely divergent rates of growth,
the use of fixed overall incre¬mental capital and foreign-exchange
coefficients can hardly be a reliable method of estimating the size of a
development programme. Moreover, it is not enough to know the total size
of a development programme. From an operational standpoint it is
essential to know in some details the pattern of distribution of
resources among various types of activities.

Planning for the national economy is an infinitely complicated
process. It involves the harmonization of a large number of independent
decisions taken by a great many agencies and groups often representing
conflicting interests in order to achieve certain targets which are
sometimes themselves in conflict with one another. Only by continuous
appraisal and critical analysis of the major strategies can it be
ensured that the main objectives are kept in mind while mak¬ing
individual decisions, and that individual policies do not conflict with
one another. It is, therefore, important to make detailed assessment of
the past experience to gain a general sense of the combination of
circumstances which, in the past, did or did not prove favourable to
growth. In his conference address [9], Dr. Huda makes an effort to
survey Pakis¬tan's planning strategy in the past and to reflect on the
appropriate policies for future. Admittedly, his purpose is to provoke
the economists "to think, deli¬berate and advise". Painting on such a
big canvas, Dr. Huda has necessarily adopted an impressionistic
technique. What we intend to do in these notes is to try to paint in
somewhat greater details a few of those parts of Dr. Huda's canvas which
have been left by him with relatively few brush strokes.

In the present decade there has been a great proliferation of
multisectoral models for planning. Part of the incentive has certainly
been the potentiality of their application in formulating the actual
plans. By now there have been so many different types of multisectoral
models that it is useful to attempt some kind of classification
according as whether or not they embody certain well-known features. The
advantage of such a classification is that one gets a general idea about
the structure of the model simply by knowing where it belongs in the
list of classification. One broad principle of classification is based
on whether the model simply provides a consistent plan or whether it
also satisfies some criteria of optimality. A multisectoral consistency
model provides an allocation of the scarce resources (e.g., investment
and foreign exchange) in such a way that the sectoral output levels are
consistent with some given consumption or income target, consistency in
this context meaning that the supply of each sector's output is matched
by demand generated by intersectoral and final use at base-year relative
prices. To the extent that the targets are flexible, there may be many
such feasible plans. An optimizing model finds the "best" possible
allocation of resources among sectors, the "best" being understood in
the sense of maximiz¬ing > a given preference function subject to the
constraints that ensure that the plan is also feasible.